Modernizing the Federal Lifeline Program for Broadband and the 21st Century

IIA – Modernizing the Federal Lifeline Program for Broadband and the 21st Century
Wednesday, October 28, 2015

[Filming started a few minutes into the event. The transcript below captures the majority of the discussion.]

Dr. Nicol Turner-Lee – Can I just say one thing, I have been part of the caveat excuse of why we do have some grey areas. The carriers, you know, and I was just in another meeting yesterday talking about this, at the end of the day the carriers have done a tremendous job I think in the way that they have used this program to date. Right, but the program expands we have to get the carriers out the way to get to the people right. Addressing some of this process and we will talk about it some I don’t want to over step, but addressing of these might get at the [inaudible]/.

Randolph J. May – Wait just ten seconds this relates to Nicol and your back. But if we can think about it as we go forward one thing that I have heard said and you just said a few minutes ago was that by removing the carriers from the process you remove the incentives that have led to some of the problems. And that could be true although, but it goes a little it against the notion that if you’re trying to make sure that everyone is covered which I think is a premise a lot of people [inaudible]. If you’re trying to do that, having incentives for the carriers to go out and do this also make sure that goes [inaudible]. A lot of these things we are going to discuss you know I think there’s some balances. Hold your fire.

Rick Boucher – Okay thank you, I think we have achieved a consensus on this point too. And it is appropriate for verifiers other than the carriers to determine eligibility. So to draw down one step deeper on that subject. Many people have suggested and I’m trying in the right way … [inaudible] Internet Innovation Alliance … Put forth early this year the issue of which, by the way the cover page is up on the screen now, and you can find that on our website if you’re interested. And it’s kind of a deep dive and the various [inaudible] informed proposals what we actually recommend in our white paper the process of coordinated enrollment. Commissioner Clyburn at the FCC before we published this white paper recommended the same thing. Harnessing the power of state agencies and the existing infrastructure they have in place to determine eligibility [inaudible] low income programs like food stamps, school lunches etc. Now to also determine lifelong eligibility this will be a useful step a presumably a neutral verifier. And so the next question is does that approach make sense and is it feasible. And are there any relevant studies that can be discussed that would correlate towards the appropriateness or inappropriateness of doing that. Mrs. Dottie is in the field but it’s also Ronald’s field so let’s just go down the row [inaudible]. Ronald would you care to comment?

Ronald A. Brise – I think that when coordinating enrollment processes is a process that makes since. For the users that process. In Florida if you are applying for SNAP, Medicaid, or [inaudible] what will happen is, in your drop down application through the Department of Children and Families you will select that you are interested in Lifeline. And once you select that you are interested in Lifeline then you will select which carrier you are interested in. Then the carrier will then connect, will get that information. Then the carrier will move the ball forward with that process. I think it’s an easy way for those who are now receiving these other services to recognize that Lifeline exists, the value that Lifeline can provide to them, and I think they can make a decision whether they want to pursue Lifeline. And that will continue to address the issue of the 22 million who are currently on SNAP and the 12 million around about who are participants of lifeline. So I think that goes a long way in addressing that and it also shows us that people are making decision as to what programs they want to participate in.

[inaudible]

Dottie Rosenbaum – Certainly, I think the idea of a coordinated approach is a good idea. [inaudible] I think that’s one model for coordinating and using the information and piggybacking the information that other programs have already put a lot of effort into verifying. We can talk more if you want about the vigorousness of those eligibility determinations and so forth. I guess the two comments I would have is that there are other models besides linking [inaudible] determine eligibility and we did an analysis, the second point is that we did an analysis that found about three-quarters of the Lifeline eligibility population participates in either SNAP or Medicaid. Most participate in both, many participate in both. And those are generally [inaudible] they are administered by the same state agencies so for us that would be the starting point of the agency that makes the most sense and the programs to coordinate. That said, I think it’s really important that people have a way to participate in Lifeline without participating in other public assistance programs, for two reasons, one some people are not eligible or don’t enroll in those programs, and most notably many childless adults and many senior citizens or other Medicare beneficiaries who may not be the poorest of the poor, but are near poor or are close to the poverty line. And the second is I don’t think anybody should have to apply for public assistance as a condition of receiving another public benefit. There should be a mechanism for people to document their eligibility without first having to participate in another program. Those programs shouldn’t be gatekeepers.

Rick Boucher – Very good. Thanks. Nicol?

Dr. Nicol Turner-Lee – Yes and I want to say I have watched the [inaudible] model and regardless of [inaudible] it makes a lot of sense. And I think we have also offered some things with coordinated enrollment the fact that we look at Lifeline, and the fact there are millions of adults who share households for example and the way that the benefit is currently structured it is one per household. So if you are family-sharing, in a sense, which is called household-sharing and you have two distinct families living in the same place, we’ve put forward a perhaps as a review of what the ecosystem of poverty looks like for many families and the program adapts to that. Given that we are strong supporters of federal coordinated enrollment programs and I will tell you why. Back in the 90’s I did a lot of work with public housing and we were trying to get broadband to public housing residents. And at the time broadband was not even a word. [Inaudible] we were talking about something else, the World Wide Web. But one of the things we tried to do with Section 8 housing authorities was suggesting that they say to people, you should get online because at that time that’s were all the jobs were. It was so difficult to have that type of coordinating role with those agencies at that time. So I’m actually enlightened by the fact that through Lifeline we are actually bringing this benefit to those residents because back in the 90’s it was important because those folks could not get a job through the newspaper, they had to go online. This is around the TSA jobs and government jobs and secret service jobs went online. The same thing is happening today but it is even more quadrupled in terms of the impact of broadband. So starting with, and we have actually recommended and we understand Medicaid, we have gone with SNAP primarily and I tell people this because we’re hitting most of the households with children. And we also think it’s important to start with a place that has good government means tested efficiencies that will allow us to get the people that need the benefit the most, getting in front of them. Today, and it’s really interesting [inaudible] when we talk about the digital divide in general, Wi-Fi has the potential to be one of those catalysts to close the digital divide and to make the barriers that prohibit folks from getting online, whether its relevance or cost, to accelerate their engagement. So by putting it in and coordinating it with a program like SNAP we’re receiving 22 million people and making sure people have the tools that they need to further engage to improve quality of life. The one thing I say to folks and I love what Dottie says because we have been [inaudible] lot of civil rights group. We do want people to be able to go and get the benefit in other ways, but we really need people to get this benefit who are at the cusp of trying to figure out how to solve problems. You cannot solve problems in the way that life has been configured traditionally. And we really want to make sure as this process continues that we do a test and learn. Start with SNAP at least. Start with resource programs that also has the ability to demote people if they actually do now qualify for the benefit. And again we are all for federal coordinated enrollment but we think this is all part of an intentional design, to ensure we can see how this works best with those programs that are serving the nation’s neediest citizens.

Rick Boucher – Thank you. Randy [inaudible].

Randolph J. May – [inaudible] I would actually just, in case you want to pursue it further, I’m going to file comments in the FCC proceeding. I was privileged to testify with Ronald actually in the Senate hearing in June, so I’ve said things on the record, so I want to be careful not to contradict myself. One thing I want to say is when we think about this, and this is a conversation you ought to think about, [inaudible] the more we engage in this conversation and the further, the more we talk about changes in the system that are truly dramatic or expensive or major that involve cost and are substantial; I don’t think anyone’s uttered the word cost yet, and how you pay for it [inaudible]. I really wish it were a matter that ultimately Congress addressed and deal with some of these changes but that might not be feasible in the short term and there are things that we should be doing. But that’s why I’m more sensitive to perhaps making a more incremental approach than some of my colleagues but the simple question really … of the coordinating control. I have got some concerns about it and one of things I said consistently is that I think the Lifeline program should be a safety net. The FCC said [inaudible] it should be a hand up and not a hand out. I’ve got a concern that programs like this which have become entitlement programs don’t just creep up the income ladder further than I think really is appropriate [inaudible] And when you tie them to other programs like food stamps or whatever… essentially the FCC and Congress is not involved, this is just a tax tacked on to your phone bill, but it loses control of the good … you can correct me if I’m wrong but I believe the food stamp program eligibility presently is that its 130% or 140% above the poverty level. I think that’s right, and that may be higher than really I’m comfortable with. The other thing about it, [inaudible] I know yesterday I Googled SNAP and food stamp [inaudible] and there is a lot of and of course everyone here knows this and there has been a lot of concerns about you know about fraud in that program as well. And so you can talk about it more later, but I guess which may be able to discern for me is that I want to see the program available to expand on the broadband but I am concerned that it’s been done it in the way that I think is appropriately constrained at least initially and if it’s going to be much more than that, and I have said this for years, that for over a decade; you can Google that one if you want to. I’m in favor on a long term basis, I’m not opposed to vouchers which we will talk about next, but I do think they’re problems in the way the FCC [Inaudible] … if Congress established a program that appropriated money for this program so that consumers didn’t pay 16% on every bill, which most of them don’t know about, to support it, then we can do vouchers. That’s the way food stamps work right? People get vouchers? But Congress, I believe if I’m not mistaken, that’s an entitlement that comes from the Treasury and I think it’s a tax on groceries when people pay. So think about, let’s be cognizant of these types of things when we go forward.

Rick Boucher – I’d like to give all the panel members an opportunity to comment on that. It sounds like you’re suggesting that the eligibility standard for food stamps perhaps should not be the eligibility standard [inaudible] …

Randolph J. May – Yea I think I’m saying that and I’m saying as well that any of these programs, I don’t think they should be forever or even on a long term basis either. I do think that, because, yes.

Rick Boucher – [Inaudible] … and signing the person up for Lifeline as a determination of eligibility for food stamps or other programs that may have different standards. So looking at the income of the person could assess whether or not that within the guidelines for Lifeline just as it does whether that’s in the Lifeline [inaudible] food stamps.

Randolph J. May – Right it’s possible, I think you could do those things, it would set it up, and it will probably be administered [inaudible].

Dottie Rosenbaum – I was going to say I can flip into my defending SNAP is not [inaudible] with fraud mode. [Inaudible] I guess the first thing I would say is that a lot of the fraud that you read about is retailers who are motivated to commit fraud because SNAP is 100% federal benefits the states pay a share in the administrative cost but the benefits are 100% federal. It has an extremely rigorous application process at the front end where every person who participates has to verify their income either by providing documents themselves or the state does data matches with reliable sources then you participate in an interview either by phone or person. And then on the back end there is a quality control system where states sample a subset of cases and there is a national error rate which is currently at an all-time low and I think it’s less than 1 % of SNAP participants are found to be ineligible in that process. So I just want to get that out in terms of people expectations are, and Ron can correct me if he thinks that’s wrong. The other thing I would say about SNAP, and the question of eligibility, is I think it’s important to realize that SNAP is the program that covers the broadest group of low income people. Medicaid is getting closer now in the states that took the Medicaid expansion but in other states Medicaid misses out on a lot of childless adults. And it serves people, a lot of people of a large variety of circumstances and people who have changing circumstances over the course of a year. So you may have families who are unemployed for part of the year, get a job, and have higher income over the course of the year, later in the year, but participated. There is a lot of volatility in some parts of the SNAP population. And then you also have senior citizens who pay disabilities [inaudible]. So I’d be happy to engage with anybody more in describing both the eligibility rules and the eligibility process just to get that information…excuse me… to get it out there. And then again I do agree that I wouldn’t want that to be the only way onto the program. So I think it’s important to give people other avenues to apply and prove that eligibility.

Ronald A. Brise – So I’m going to start with the concept of the safety net versus the hand up and the handout issue. I don’t think there is a conflict between being a safety net program and the concept of a handout providing that the parameters are set. [Audio silence] If we are plugged into a program such as Medicaid or SNAP or TANF or free school lunch or whatever is used in that universe to identity or verify eligibility. We add in the component of the enrollment then we have sort of buttressed ourselves realizing that when a person’s situation has changed when the broadband access or the Lifeline access has helped that person move along the economic ladder then they no longer need that assistance then they are no longer eligible for that assistance. So I believe in that space that, there are policy makers who make the decision of [inaudible] it’s 140% above the poverty line. The reality is when you’re dealing with someone who is just at that level there is not much they can do with that amount of money that they are receiving on a regular basis. So if we deal with the Medicaid component and if the concern is whether the eligibility for Medicaid needs to be addressed well that needs to be addressed separately but that shouldn’t keep us from taking a look at Medicaid as an eligibility factor for Lifeline.

Dr. Nicol Turner-Lee – Yeah, I was just going to say I think [inaudible] focus on one part of it, I do want to say that I think the coordination with the federal program is again as I said a pilot, it’s one way for us to garner lessons learned before you expand that to other programs. I think the reason that Dottie said was one of the reasons we advocated for SNAP. I do want to talk about this whole entitlement issue, and respectfully to Randy, I get it, I mean this country, this Congress, is particularly concerned about the expansion of the [inaudible] we’re going to walk around, and be disruptive, but I think what is so neat about this reform, this modernization, this program, is that when we connect the dots, I mean traditionally, historically, the Lifeline program was built just as a telephonic program. It was all about surplus, and telephones and access, and voice services. We cannot deny the fact that entitlement to broadband is not an entitlement, it is a right, it is [inaudible] first class citizenship. People are no longer able to participate offline, they have to be online to get the very benefits we are talking about. So we have to find a way to change the paradigm, and I agree with them, we cannot, you know, pillage the budget on this. We have to be very fiscally sound. There have been suggestions on how you can, you know Commissioner Clyburn has even said that in response to the form. She is not saying there should not be a budget or some sort of fiscal responsibility or accountability about this program. I think once we get the mechanics working, and for those of us who saw the FCC NPRM, it was like a novel or dissertation. [Inaudible] I think the devil is in the details. Once we understand how this program will actually be implemented, I do think it is fair to go back and revisit the budget but I think that it’s a disservice to citizens that, who statistics of offline participation, correlate with poverty in this country. The Pew Research Center put out a study in July 2015, that suggested that 15% of Americans who are still not online, and this is in the context of broadband adoption only being at incremental single digit increase, since 2009, was at 13% and now is at 4 to 5%, so we’re stalled. And the 15% of Americans who are not online are low income, disproportionate of color, immigrants, seniors and rural. So we can decide to say, well Lifeline, we need to have this, it’s not a safety net. We’ve got to figure out how to get the other part of America online, because they are not going to be able to do the things that we can do as first class citizen in this country, that we solve poverty. [Inaudible] but I think that we need to change the language. Because if we talk about it as an entitlement program, it will be a program that will not make it to the level of modernization that is necessary.

Rick Boucher – Thank you, so I think that we have explored the subject of coordinated enrollment and what I take from this conversation is that the panelists think it is good, that it is feasible, that different standards that apply to eligibility for Lifeline on the one hand and other low income and systems on the other need to be taken into account. By doing that, and having the agency involved in the decision making process, making the determinations, is probably an objective.

The next subject on the forecast is delivering to the consumer an incredible lifeline benefit and giving the consumer the power then to shop in the market and choose the service provider and the percentage plan that is most appropriate for the consumers’ specific needs.

So address if you would, as the first matter, the feasibility and the desirability to have membership. And there’s a second part to this question, which is that some have claimed that if we have a portable membership that wouldn’t necessarily require the Lifeline beneficiary to visit a physical location to the service provider’s store or premise and perhaps to even to have to do so on a monthly basis in order to have the benefit made. Seems to me, that a good answer to that challenge is to have this benefit delivered portably directly to the consumer in electronic form. So the consumer will be able to get from the enrollment authority: “Here is your electronic log in information, here is your electronic pin,” and then the consumer can take that information, log in with the pin, and call his service provider on the phone and accept their service on a monthly basis. Perhaps they could go on the Internet and do the same function. So going to the store would be much less necessary than it is today if you have this benefit delivered portably in electronic form.

I realize that some of us have become somewhat argumentative on their position, but I would like to pose the question to the panelists

Dr. Nicol Turner-Lee – I’ll start. I know I like the idea that you just put forth. That helps the people who have been struggling with the question, how do you promote lifeline on a benefit card that is rooted in reforming a program that keeps the idea of the consumer and what it takes to be a consumer? It forces competition in the market place particularly within the broadband world. I think there is much to be said about taking that barrier of having a physical location where people have to go to whether it’s a text message or other ways to deliver that portability benefit. I think that if we can learn from those lessons of what has worked in the marketplace today, the point of it is to allow people to have the choice, to have it when it’s still seamless. It should be seamless it should be easy, it should not be something that is burdensome, I am not sure how many of us have sat in a benefits eligibility session. So I will have to agree with Congressman Boucher, that we need to have this 21st century feeling, and I like the electronic login because it allows us to deliver services within the context of what we are trying to reach with the program.

Rick Boucher – Okay are there any other comments?

Randy May – This just reinforces for me why you were such a good and effective chairman because after each round you’ve noted that “we’ve achieved consensus.” No really, I think on the basic motion of expanding broadband that’s fundamentally important. Again, as I mentioned earlier, just to relate it back briefly because there are other things I want to move onto to like the cost, a concern I have about this type of thing again relates to fraud.

This was pushed by the GAO and I give Commissioner Clyburn credit because they did take action to reduce fraud. I know, not just from Googling, that they had this type of electronic benefit and I guess the right word is trafficking in these types of things. I don’t want to base too much of this on anecdotes but someone I know was a farmer for a long time and he would go and get his food stamps and he was happy to receive them, but he would see different people using the same benefits all the time. I don’t know, maybe they were cousins or something. The issue has to be addressed along those lines.

A couple times Nicol has mentioned a pilot program. I’m sure the commission planned some sort of pilot program before embracing all of the reforms in one package, and that might appeal to me. A pilot program could be a “way station” before implementing other programs and if that’s what you’re supporting, I would support that as a way to see what works.

Dr. Nicol Turner-Lee – I just want to clarify really quickly on that. The commission actually did do a pilot program and had many conversations with service providers but they were really just trying to pilot out cost and project activity. Interestingly enough, broadband prices went down anyway…

Randy May – Those were some poor results though…

Dr. Nicol Turner-Lee – Yes you can say they were poor results. We hear people who say we need more pilot programs, but we also understand the complexity of the trade of information, the complexity of trying to align the different standards and due process with application, like what was done in Florida to provide some good models at a state level, but we would just like to see data collection and auditing of how the program is progressing before we farm it out to a full ecology of families. But you’re right, this is a really good time for the FCC to keep collecting data that’s significant. And this coordination will be way above what the FCC has done on this program.

Rick Boucher – Let’s just get back to the subject, would you be in agreement of delivering benefits in electronic form?

Dr. Nicol Turner-Lee – I definitely agree, part of our conversation is about competition. We need people to make the choice in their particular situation. So before I thought, “Oh do they just go into a store?”, but I like what you said, the ability to still keep the benefit can also contribute to reviews if the benefits kept up with that person.

Dottie Rosenbaum – Yes, what you said was exactly what we said in our comments. Like with Medicaid, you’re going to go to multiple providers and multiple stores in the same month, you want the choice of authorized retailer but I think what we’re talking about here is one provider for each month with just the authorization code and the providers can communicate with whoever the verifier is and say, “This person is eligible…this is the code they gave me…do you agree?” I think it makes a lot of sense.

Rick Boucher – Okay, Ronald?

Ronald A. Brise – So we didn’t address that issue in our comments, but I would say that conceptually that makes sense. The only caveat is making sure that it’s not so portable that it becomes a commodity, that is could be traded among different folk so that’s my perspective.

Rick Boucher – So these were the initial subjects where we were hoping to derive consensus, and I think we’ve achieved the goal [inaudible]. It took us about an hour to get there, but I think we have, so I’m going to turn to the subject that Randy raised in his initial answer about expanding broadband and that is finding a way to constrain costs. I would just note again that the FCC vote on initiating this rulemaking was not unanimous, it was 3 to 2. The two dissenting commissioners were concerned about constraining costs. Ideally sometime next year we would see the FCC have a unanimous vote about comprehensive reforms to the Lifeline program. And to get to that degree of unanimity, we’re going to need to find consensus on the subject the two dissenting commissioners care the most about, which is constraining costs, and making sure that as the number of Lifeline subscribers increases, which is a goal we want to achieve, that we don’t see the cost of the product skyrocket and this is not going to be easy to do. This is the greatest challenge that is faced in these reforms. So let’s talk about it. How can we constrain cost and do so in a way that enables the program to be expanded to broadband and to narrow that gap that Ronald mentioned where you’ve got 22 million subscribers to food stamps, but today only about 12 million subscribers to Lifeline, and yet the eligibility standards are not all that different. So, it’s a huge gap. We’d like to see it closed. How can we do that in a way that doesn’t dramatically increase the cost of the programs, that’s the question I would put, and would welcome thoughts about innovative ways to achieve that goal.

Ronald A. Brise – So, I guess you need a ceiling, so if you’re going to create a budget you want to create a ceiling. And what is the problem with the most rational ceiling that you throw out there? So you can probably take the programs that people use the most to connect eligibility to and compare eligibility to. So whether it is SNAP or Medicaid, you look at those numbers and then you create a budget based upon those numbers. So if you’re, you know, whatever number, 22 million SNAP eligible then maybe you create your budget based upon that and so that allows for the full universe from your perspective at this moment in time to be able to allow you to sort of build up to that. Now granted, we’re probably not going to get there within that time frame, but it’s also elastic enough so as that number changes, it allows you to work within that space.

Randolph J. May – Maybe I’ll go next, and you know this is a difficult subject, but it’s obviously important if people are concerned about fiscal restraint which they say they are [inaudible]. And I find it difficult in this sense. Maybe this is a little bit stream of consciousness but number one, I’m not opposed per se to spending more money than we presently spend on Lifeline to expand it somewhat into broadband and I think honestly if we’re going to be realistic about it, and not, you know, be indulging in fairy tales, you know, currently the benefit is $9.25. [inaudible] If you were in the marketplace, that doesn’t get you a lot of broadband. Except for programs that private companies offer like Comcast Essentials, is a good one. Those things are great. I appreciate them, but if they were doing the whole job then I guess we wouldn’t be having this conversation here. So you know, the chairman of the FCC has said repeatedly that 10 megahertz is not even in the ballgame, 25, the definition of broadband, I guess I’ll put it this way is 25 megabytes per second, anything less is not even [inaudible]. Well if that’s true, how many people in this room, you don’t have to raise your hand, but I think if we can get you in secret, how many people here are going to support offering this benefit to low income people as something less than “broadband.” I mean the FCC has said it’s not [inaudible]. So you know, are we really talking about, is that going to be the standard. We have to have that discussion, really. So that’s just one aspect of it, really I think as Ronald would recognize, there are other parameters that go into defining the program that would in total make up the basis to project what the cost would be based on the demand, right. We have to define those. It’s not like it’s ours to state it, but it’s very dependent to do it right. And it requires, I think, see on my part, I really have the sense that people that are motivated to do this that they’re really being really forthright about where they want to go and how far and how fast they’re taking this. The word entitlement, we’ve talked about, I don’t think, when I use it, it’s not in the derogatory sense because I said at the beginning, I believe in some safety nets. I don’t want people to go without food and other things. I don’t use it derogatorily, but if this program, the way it’s set up, is an entitlement that means, what that means, is trying to [inaudible] costs expand with the people that are eligible and entitled to it. Let’s state that. So this is where the problem lies. A lot of this discussion at the Commission between the Democrats and Republicans has been related around the budget or a cap, whether there should be one or the other. The way that I think about it, which to some people may seem idiosyncratic, in light of my expression of [inaudible] with some constraints is really this, I don’t want to assume a cap, a hard cap, sometimes the word hard is placed in front of cap, I don’t really understand what the difference is. But I don’t want to see a cap or a hard cap placed on the program that would mean [inaudible]. The cap is supposed to imply that if you reach that level, the next person that comes along who would otherwise be eligible is denied. I don’t think that’s the way Food Stamps works, is it? In fact it works the opposite, if we have a recession, it goes up. Some people may argue that it goes up anyway, but it goes up and that’s the intent of the program. So I’m not in favor of a hard cap. I guess the way I would put it is I think as the way I think of budgeting. The way I think of budgeting is you try to look at the parameters and you define the parameters and the way that you’re going to relate to the cost of the program. And this is the other side of the equation that we haven’t talked about [inaudible]. But the costs are paid by someone, whether it’s Congress [inaudible] which is not what we’re talking about now, or consumers. Something else to keep in mind, you know, please keep this in mind. The current USF fee is 16%. You know everyone pays that and people really just hit the margin that might not be eligible but the next eligible. I mean they pay that and that effects their decisions too. I mean, that’s not a small amount. It started at 5% and it’s gone up to 16%. [inaudible]. I hope people, I mean, I’m not in favor of a hard cap, so I disagree [inaudible], but I want to see attention paid to the definition of the program in a serious way that doesn’t project that the expenditure of the program would be too much above what it is today, but I’m willing to see something if that’s what it takes to get broadband to people.

Rick Boucher – So Nicol, what [inaudible] recommended here is something less than a hard cap but a little restraint on cost. What are your thoughts about that?

Dr. Nicol Turner-Lee – I mean I, so I think between the Commissioner and Randy we’re getting close [inaudible]. I look at it this way when people ask us about cost, because we don’t really mention cost given the fact that this is a really hard question to answer, particularly for us because we don’t know the mechanics of the program yet. We are still trying to figure out what speed is the broadband, are we going to change eligibility, how are they going to get it, all that stuff.

Randolph J. May – One second, I don’t mean to interrupt, you can’t only, I think to be realistic about it, talk about the things that you want to talk about, which I appreciate [inaudible], but it’s not the way I want to talk about it without…

Dr. Nicol Turner-Lee – I’ll tell you how we have actually conceptualized what costs would look like. We know what the benefit is. We have scoured the record and it appears that there’s not too many people who want to increase the benefit significantly, right. I think people want to see what the jury is out on in terms of what the type of broadband service, but I think honestly, we may stay in the range of what the current benefit may look like. If not, a couple of dollars more. But I think there’s something I always talk to people about when you talk about caps, budgets, ceilings, when Jessica Rosenworcel came into the Commission she captured millions of dollars of savings in the Lifeline program that very first couple of years in her term, where she came in and this was her issue, where we actually saw a lot of those cost savings and [inaudible] go back into the fund which created more efficiency. I think the other piece of that is sort of figuring out where those captured savings were and figure out how to dole out those savings to ensure that we have some buffer against any increased costs, I think that’s why we’re still trying to figure out how those savings can be accessed here. I think the other piece about it too, when we’re talking about budget, the reason that we’re so supportive of competition is because it allows [inaudible] people and the marketplace to respond to the benefit amount and the benefit allowance in a way that can be radically different than what many of us think. We talk about the Comcast Essentials program, which I’m supportive of, you know when I was doing digital activism in Chicago, getting access within the home, for example, was upwards of $25 to $30, right. Now we’re seeing in a short span of time a lot due to light touch regulation and other factors, a marketplace where there are various forms of entry. But then I caution, because like Randy, we also want to make sure that we don’t give a degraded quality of service and broadband to families that they can’t do anything that they want to do and they’re actually discouraged from going online. Because I tell people, if it takes me 2 hours to look for an airline ticket on my phone, I can’t even tell you how long it would take a [inaudible] person to look for a job and that’s just within the context of what this program would look like, so we’ve got to answer those questions. But I say that to say competition may also help us to capture some of those savings, as well. And we’ve actually advocated that perhaps the allowance is a bottom, if there are people who want more, they should be allowed to subsidize those extra dollars towards a service. When I was working for a company called [inaudible] back in the days of [inaudible] delivering computers and developing wireless networks all throughout the country, we found that getting people online for that first year, encouraged them to want to become consumers of broadband, because they realized the relevance to not only themselves, but to their families. I think Dottie’s comments too, about the SNAP program being one with [inaudible] I think that we would actually see a program that could be financially fiscally sound. I think the last thing too, I think the ceiling may be a conversation to have, you know, when we get to what the program looks like, it is important for the [inaudible] to be fiscally accountable. There are other creative ways that you know, money from excess revenues [inaudible] can be directed to programs like this, which add private sector involvement. There’s a lot of private sector players that we’d love to step up and figure out how to supplement some of these hiccups when it comes to getting to what this cap looks like. I don’t think that we need to, at this point, talk about hard cap, because we don’t know what hard program looks like. If we start with the conversation, we may be able to get to something that again, we saw encouragement last night in what we can do as a bipartisan effort, I think the same thing can be done here. So I think we can learn from the lessons of what states have done with the program to figure out if there are ceilings that are too high and ceilings that are too low to ensure that people benefit.

Ronald A. Brise – If we are talking about getting into consensus, sometimes agreeing on all the specifics won’t allow us to get to the consensus, but if you agree on the framework of consensus, if you are agree to the concept, then this is the parameter, the walls, the parameters we agree to will help us get there so you can get closer to a 5-0 vote, maybe a 4-1. Because you’ve agreed on these broad parameters that are workable, based upon not the specific numbers but the trajectory.

Dr. Nicol Turner-Lee – We put this in our comments because it was in the record, that we don’t penalize consumers in our quest to cap this program, which is a universal program. There should not be credit checks on families to participate in this program. There should not be other limitations that stop them from getting the benefit so again [inaudible] feels, we’ve had this conversation. Let’s not pass that burden back to the consumer, let’s figure out [inaudible] and what works to make it effective.

Rick Boucher – Good points. Dottie?

Dottie Rosenbaum – Yes, we have a budget [inaudible]. This is really helpful. I was joking before that when you don’t know very much about something, every conversation you start at the very bottom of the learning curve, and every conversation you learn so much and now I at least understand. I was so confused because yes of course you have a budget. Everyone has a budget, you plan, you say this is what we’re expecting. Every organization has a budget. But of course you don’t have a cap. The caps are difficult to administer, they’re inequitable, and you don’t want, at least in my view, they’re complicated, people are spending a lot of energy on things that are unproductive, in my view, when you have a cap. So I think, I guess what I’m trying to say is, [inaudible]. I would say that taking it slow. I’m assuming just looking at the size of the request for comments and what’s going on here and the hugeness of the market issues, whatever. This is a 5 to 10 year project to get to [inaudible] or even longer, and so it seems like you do come up with what your expectations are, you think about, if not pilots, the rollout strategy because I presume you don’t want, I mean, we have some recent evidence of rollouts that were implemented rather quickly, difficult, especially with technology involved. So I think that lots of efforts to take it slow and test it will provide a lot more information on how many people really will take it up, how the market will respond. And the last thing I’ll say is I think [inaudible] is an interesting example, because [inaudible] a shorter program that provides, vouchers to low-income pregnant women and young children was a capped program; it was capped by Appropriations. There was a bipartisan commitment that should be available because of the huge benefit that research showed was incredibly beneficial over people’s lifetimes, for pregnant women and young children to get the benefits over about a 10 year period. It was expanded, there were reforms in the market, when infant formula manufacturers gave rebates that lowered the cost, they in part helped to enable that expansion, but it was done relatively slowly. I think there are other examples that we could look at and I would be happy to collaborate with anybody in trying to think through [inaudible] research and whatnot, what other experiences have been. I’m sorry, I have two more comments. The first is copayments, the evidence in low-income programs and healthcare coverage in general, is that when you ask low-income beneficiaries, especially the low, very poor people to pay copayments [inaudible] they do not make good use of their healthcare and it really dampens participation and leads to undesirable results, so I would discourage that as a way of making the numbers match up, especially with the very lowest income. On the other hand, another thing that is a very big debate in human services and life support programs is the question of how do we phase out benefits. And the fact that many people on both sides of the aisle are concerned about work disincentives. That if you phase things out too quickly, you run the risk of discouraging people from taking jobs, and they’re not better off if they work more hours or they lose their income. And SNAP is one program that phases out gradually so I think when we’re talking about, that would be an important thing to look at, and to not create cliffs when people… and then they lose their job, they don’t have access to the technology. There is a cycle of things that happen to people when they start to lose access to some of the things they’ve been [inaudible] important support.

Rick Boucher – Great comments from everyone. And I think we have some innovative thinking here about how to address cost control in a responsible and perhaps different kind of way. [Inaudible] out of the box thinking.

Randolph J. May – Just to show another point of consensus on this, probably, you were mentioning the copayment issue, and this is a case where I’ve said in the past, I don’t advocate a copayment for the reasons you’ve said. I think there are other ways to get at the constraints and the concerns I have. But if you have a program for low-income people properly defined, and if it has the effect you describe… but I haven’t advocated copayments really.

Rick Boucher – So the other takeaway I have from Dottie’s remarks was whether to program out, incrementally over time, tests and things to see if it works, and to learn from that and make adjustments along the way. And perhaps by that process you come to some realistic way to control cost, when it is based on experience. Is that a fair summary of your point?

Dottie Rosenbaum – Yes, but you say it so much better.

Randolph J. May – I bet this is a cause that Dottie would appreciate, maybe. At least let me give something for the four of you to think about. I mentioned Rick, I think this is a program that recovers, appropriates, money, the money is not raised by sale of food for someone else or whatever. I think that’s right, and I think, you know, we talk about caps and budgets, and I don’t know how long it’s all going to last for, but Congress goes through a process, and just so you’ll understand the issue, and I hope you’ll be with us for other sessions like this. This is a program that is great for a fee, call it what you will, so therefore it lets…I’ll just close with this – let’s perhaps proceed more cautiously and incrementally, knowing that we’re doing something worthwhile, and with benefit, but not do it in a way that things go, things possibly go haywire, or lead to the types of abuses that would the provoke a reaction that potentially jeopardizes the goal that we’re trying to achieve.

Dr. Nicol Turner-Lee – I think all the reasons that we’ve discussed today are why this has moved beyond just a commission initiative. I think that is the beauty of this conversation, that it really encapsulates the fact that the lifeline program is no longer just this telephonic program that sits on the edge. It’s really a part of solving problems, and I think that, if we do it right, people will experience efficiencies in other areas.

Rick Boucher – One other topic, we’re pretty much at the end of the time that we had scheduled for, which is an hour and a half, but I think it’s important to address this. So let’s be somewhat conservative in our use of time as we talk about it. You know, we do have this gap, Ron mentioned it first. It’s come up in some of the other panelists’ comments. 22 SNAP recipients, 12 million lifeline recipients, somewhat comparable guidelines for eligibility. You know, why do we have this big gap? What can be done to encourage more people to sign up to lifeline? Maybe if we make broadband an eligible service for lifeline, that takes us part of the way. But are there other things that have to be done? Is there an outreach or other steps that the FCC might want to consider encouraging or initiating that could help to increase the sign up?

Dottie Rosenbaum – Let me ask Ron a question, what is the percentage that is limited?

Ronald A. Brise – That’s a good question…I just did the report last week. It is important because we have a pretty robust outreach program. As the commission, we can push the companies a little harder and make sure that they get out there. We see an inverse relationship, right? The higher the eligibility, the lower the take. And so I think we’re at 48% of those who are eligible who actually participate in a program. And so we’ve had discussions about that, and we’ve come away with a few conclusions. One, a lot of people come off because of the recertification part of the process. You know, sometimes it’s more challenging than it needs to be. Two, the economy gets better, and as the economy gets better, people make certain choices as to – they’re right on the bubble so they decide that they’re not going to pursue the program, or it’s not worth it for them to go through the recertification process to get into that space. But I really do believe that adding broadband into this would definitely address both those issues. Because, one, it’s an incentive for the consumer – “I really would like to have broadband. So, since I would really like to have broadband, then, maybe I’ll spend that time going through the recertification. Maybe I’ll check that box as I apply for these other services. Or – I don’t want these other services, so I will participate in an outreach program, so I can go ahead and apply for the lifeline program since I’m eligible for these other programs.” So those are components that play into it.

Rick Boucher – Other comments?

Dottie Rosenbaum – I’d just say that lessons from other learning programs, I think the point that Ron makes about higher income people tend to have lower take up of things is true. SNAP has an 80% participation rate, higher incomes are much less likely to participate, so that’s not uncommon. That being said, unfortunately, there are a lot of very low-income people who are disconnected from a lot of what could support them, and so, in SNAP, we spend a lot of time thinking about how to increase participation, make it easier for working families to participate and not have to deal with a lot of the paperwork, you know, they didn’t complete the recertification process because some paper hasn’t been returned, so there’s administrative failures. I think that coordinating processes makes a lot of sense. Transparency I think makes a lot of sense. Where people know where to go and what it is. Even I had to do some background search, some Googling. It’s hard to get that information about what you should do if you want this benefit. I would choose a lot of partners, a lot of community members. If there were a simple process, a point of contact, where people would know what to do for recertification, I think that would go a long way towards the take up.

Rick Boucher – The analogy I like is that states thought they can get more people registered to vote if they are able to get people to register at the Department of Motor Vehicles when they renew their vehicle license or their registration. That made a remarkable difference in terms of voter registration numbers. It’s analogous to allowing states to coordinate enrollment, so when people go in for other low-income benefit programs, if they’re also eligible at that point to get lifeline, that can happen at that agency – verifying that eligibility, communicating it to the enrollment agency, which is presumably the universal service administration. That could help. It could make a difference

Dr. Nicol Turner-Lee – Well I am going to say: keep it short, make it known, make it be supplemental, we are not creating a public assistance program. We’re creating a supplement, a lifeline, a gateway for people to get access to the services that will compliment that. And make it easy – I think how easy it can be for people, and for us, in the 90s when you were trying to get people to do broadband, it wasn’t easy. It wasn’t supplemental to everything they needed to do. So now I just think we’re in a really good position to make sure that it’s contextualized in a way. I think that’s why it’s important to get this underway and embedded in the fabric of the tech programs.

Rick Boucher – Any thoughts on that?

Randolph J. M2 – Um, no, I’m going to let us go out on a happy note.

Rick Boucher – On that note, I’ll say thank you very much to this excellent panel. This is exactly what we hoped to achieve here today – some very creative thinking about how to inform the lifeline program, and I’m impressed by the level of consensus we’ve reached. Let’s have a round of applause.

The Federal Communications Commission’s Lifeline program was created three decades ago to connect low-income Americans to the telephone network. The pre-broadband era program is overdue for an overhaul, and the FCC has now embarked on an effort to modernize and reform this vital program. Many call for change, while others resist it – yet it’s important to evaluate recommendations in light of how the program would actually function in practice and the impact that it would have in a broadband world. Sensible modernization of Lifeline is critical to ensure affordable access to 21st Century high-speed Internet broadband services.n nThe Internet Innovation Alliance invites you to join a policy discussion that will address:

How consumer eligibility for Lifeline should be determined to eliminate improper economic incentives and ward off waste, fraud and abuse.

What role state governmental agencies should play in enrollment and de-enrollment to streamline program administration.

How to modify the existing subsidy to enhance consumer choice and spur the competitive offering of Lifeline broadband service in the marketplace.

What can be done to enable and incentivize more service providers to voluntarily participate in the program and compete for the purchasing power of Lifeline consumers.

In response to a recent editorial published by the Washington Post on FCC Chairman Ajit Pai’s move to delay approval of nine of the 900 Lifeline providers, our own Bruce Mehlman penned a letter disputing some of the editorial’s claims.